MSC bank is the apex co-operative bank in the state that controls credit in the entire co-operative sector, and forms the backbone of the rural economy.

The probe can become problematic for former deputy chief minister Ajit Pawar, and 43 others.(HT FILE)

The probe into financial irregularities in the Maharashtra State Cooperative (MSC) Bank that has several leading politicians under the scanner, will now be conducted by a retired judge and is to be completed within six months.

State cooperation minister Subhash Deshmukh made the announcement in the legislative assembly on Friday.

Shivaji Pahunkar, additional registrar of the state cooperation department was appointed to conduct the inquiry against the 44 directors of the MSC bank for financial irregularities in 2014. However, in the last 30 months, Pahunkar has sought four extensions.

MSC bank is the apex co-operative bank in the state that controls credit in the entire co-operative sector, and forms the backbone of the rural economy.

The move to complete the probe within six months can become problematic for former deputy chief minister Ajit Pawar, state agriculture minister Pandurang Fundkar, Shiv Sena MP Anandrao Adsul and other 41 senior politicians, largely from Congress and Nationalist Congress Party, who served as directors on the board of the bank.

The bank board was dissolved by the then chief minister, Prithviraj Chavan, following the directive of the Reserve Bank of India, as the bank was in red. The action was taken based on an inquiry report by the National Bank for Agriculture and Rural Development.

The report pointed to gross financial indiscipline and lack of financial prudence while handing out loans, that left the bank with a negative net worth of Rs144 crore.

The board of directors were replaced by two state-appointed administrators.

Pahunkar, in his inquiry, had given show cause notices and held hearings on the matter, but nothing else had come out of it.

The issue was raised by the legislators during question hour. They alleged political pressure on the investigation officer as the reason for the delay in the probe.

Replying to the debate, the state cooperation minister admitted that the investigation was announced 30 months ago and is yet to be completed. “A retired judge will be appointed and will be asked to complete the probe in six months,” Deshmukh said.

The bank is now performing well, with its deposits rising by Rs1500 crore. Its NPA (non-performing asset) has come down to 0.3 per cent, he informed.